Americans kept up payments on their credit card bills in September, despite a deteriorating jobs market and the Sept. 11th hijacked airplane attacks, bond rating service Standard & Poor's said on Wednesday.

But Americans' ability to meet their debt obligations will likely be pinched in the coming months as more workers lose their jobs in a sluggish economy, S&P warned.

``Consumer confidence continues to show signs of weakness with U.S. consumers nervous and the job market getting worse,'' S&P said in a statement.

S&P's two key barometers of credit card loan performance were stable in September versus August.

The company's monthly measure of bad credit card loans that card issuers wrote off stood at 6.5 percent in September, unchanged from August but still 1.4 percentage point higher than a year ago.

S&P projected that the charge-off rate would climb to 8.4 percent with an escalation in unemployment. The jobless rate is expected to peak at 6.5 percent versus the current 5.4 percent.

S&P's gauge of late credit card payments was unchanged from August at 5.1 percent. But the September figure was still up from 4.4 percent a year ago.

But S&P noted that 80 percent of card issuers reported higher delinquencies in September than August. It blamed a larger number

of late payments on mail service disruption and slower collection efforts following the Sept. 11 attacks.

S&P monitors $366 billion worth of credit card loans that were bundled into securities sold to investors. These account for nearly two-thirds of total loans outstanding.


While the overall credit card industry remained healthy, NextCard Inc. and Providian Financial Corp., two issuers that target risky consumers with patchy credit histories, suffered earnings declines and higher loan losses, S&P said.

``The credit card market was also impacted with the negative earnings announcement of Providian and NextCard, leading to greater scrutiny on credit card deal structures and performance of the underlying asset pools,'' S&P said.

Since October, NextCard and Providian stocks have lost more than 90 and 80 percent of their values. respectively. Both companies said they may consider putting themselves up for sale.

What would help card issuers in the coming weeks would be another expected interest rate cut by the Federal Reserve before the year ends, S&P said.

Lower borrowing costs for card issuers would offset the expected increases in bad loans and delinquencies, according to the rating service.